LOS ANGELES (AP) — A proposed California tax on billionaires is creating a rift within the Democratic Party as national leaders search for a unifying message ahead of the fall midterm elections, with some of the party’s most prominent figures taking opposing sides.
Sanders to Campaign for Billionaire Tax
Bernie Sanders will campaign Wednesday in Los Angeles in support of the tax proposal, which has drawn criticism from tech leaders who are threatening to leave the state. Democratic Gov. Gavin Newsom is also among those opposing the measure, warning it could destabilize state finances and harm California’s competitive standing.
Sanders is scheduled to hold a rally near downtown Los Angeles. He previously won the 2020 Democratic presidential primary in California by a significant margin and has long criticized wealth inequality.
Proposal Details and Funding
A large health care union is seeking to place a proposal on the November ballot that would impose a one-time 5% tax on the assets of billionaires – including stocks, art, businesses, collectibles, and intellectual property. The revenue generated would be used to offset federal funding cuts to health services for lower-income individuals enacted by President Donald Trump last year.
Sanders expressed his strong support for the tax on the social platform X, stating, “Our nation will not thrive when so few own so much.”
Political Debate and Concerns
The debate over the proposal comes as voters across the political spectrum express concerns about economic conditions and the future. Distrust in government’s ability to address these issues is widespread.
The proposal has created a divide between Newsom and the progressive wing of his party, including Sanders, who has suggested the tax could serve as a model for other states. Brian Brokaw, a longtime Newsom advisor, argued the proposal would worsen affordability issues and harm schools.
Midterm elections often result in losses for the party in power, and Democrats are aiming to regain control of the U.S. House of Representatives. Reconfigured House districts in California are expected to potentially add as many as five seats to the Democratic column.
“It is always better for a party to have the political debate focused on issues where you are united and the other party is divided,” said Eric Schickler, a professor of political science at the University of California, Berkeley. “Having an issue like this where Newsom and Sanders — among others — are on different sides is not ideal.”
Schickler added that the proposal’s popularity among voters could help Democratic candidates stand out.
Impact on Campaigns
The issue is already influencing the gubernatorial race and other down-ballot contests. Republican candidates for governor, Chad Bianco and Steve Hilton, have warned the tax could lead to job losses. Democratic candidate for governor, San Jose Mayor Matt Mahan, has stated that addressing inequality requires federal tax code reform.
Opponents of the tax are launching targeted emails and social media ads to influence party insiders, coinciding with Sanders’ visit and an upcoming state Democratic convention.
Supporters must gather over 870,000 petition signatures to qualify the proposal for the ballot. Millions of dollars are already being invested in political committees related to the issue.
Newsom has consistently opposed state-level wealth taxes, believing they would disadvantage California’s economy. He is attempting to prevent the proposal from reaching the ballot, particularly as he considers a potential presidential run in 2028.
Analysts suggest a potential exodus of billionaires could cost the state hundreds of millions of dollars in tax revenue. Supporters argue the funding is necessary to offset federal cuts and maintain vital services for Californians.
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